Economy growth revised upwards to 0.4 per cent

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The economy exited the recession at a faster pace than was originally predicted, figures from the Office for National Statistics (ONS) have revealed.

Gross domestic product (GDP) rose by 0.4 per cent in the last three months of 2009, a figure that has been revised upwards from an original estimate of 0.1 per cent and then 0.3 per cent.

The positive change is the result of higher output from the service, construction and agricultural sectors, said the ONS.

The rise in GDP in the fourth quarter of last year followed the deepest recession since the war, as the economy contracted for six quarters in succession.

In 2009 as a whole, GDP fell by 4.9 per cent, the largest annual fall on record, compared with a rise of 0.5 per cent during 2008.

David Kern, chief economist at the British Chambers of Commerce, said a double dip recession was still a potential threat that must be avoided at all costs, and that any consideration of raising interest rates and withdrawing the quantitative easing stimulus must be postponed until there is clear evidence of secure growth.

"These figures are stronger than earlier estimates and better than most analysts' expectations," he added.

"It is important to stress that UK growth in the fourth quarter of 2009 was stronger than that of the Eurozone. Nevertheless, it is clear that the UK recovery is still frail, vulnerable, and businesses are facing serious pressures."